Bank fined $25 million for alleged links to terrorism

Federal regulators fined Riggs Bank a record $25 million on Thursday for allegedly violating anti-money laundering laws in its handling of tens of millions in cash transactions in Saudi-controlled accounts under investigation for possible links to terrorism financing.

The civil fine against the midsize Washington bank with a near-exclusive franchise on usiness with the capital's diplomatic community is the largest ever imposed on a inancial institution for such violations, experts said.

The action by the Treasury Department's Office of the Comptroller of the Currency came in an order made public late Thursday. It followed weeks of negotiations between Riggs officials and the banking regulators.

The order said the bank's internal controls "were, and continue to be, seriously deficient."

"Riggs failed to properly monitor, and report as suspicious, transactions involving tens of millions of dollars in cash withdrawals, international drafts that were returned to the bank, and numerous sequentially numbered cashiers' checks," it said.

In addition to the accounts, since closed, that were controlled by Saudi diplomats, the order also mentioned accounts held by officials of Equatorial Guinea.

Riggs did not admit to or deny wrongdoing in agreeing to the fine.

Bank spokesmen could not immediately be reached Thursday night.

The FBI and regulators have investigated, for possible connections to terrorism financing, large cash transactions in Riggs accounts controlled by Saudi diplomats.